What if there is a technological advancement that transforms the very basic pillars of our society. A technology that fundamentally influences the way our economy and businesses function. That could change our conceptual understanding of trade ownership and trust. This technology already exists. It is called cryptocurrency. Bitcoin is not just virtual money, but a ground breaking technolgy for which money is merely one of the possible applications. Money exists to facilitate trade Traditionally, trades are recorded in bookkeeping and this information is often isolated. For this reason, we use third parties and middlemen we trust and to facilitiate and approve our transactions.
Think of governments, banks, accountants, notaries, and the paper money in your wallet. Bitcoin software enables a network of computers to maintain a collective bookkeeping via the internet. This bookkeeping is neither closed nor in control of one party, rather it is public and it is available in one digital ledger which is fully distributed across the network, called the blockchain. All transactions are logged including information on the time, date, participants, and amount of every single transaction.
Transactions are verified by bitcoin miners. If anyone attempts to corrupt a transaction, the individual nodes in the network will not arrive at a consensus, and hence will refuse to incorporate the transaction in the blockchain. This is why we can always trust the blockchain. A bitcoin is divisible in a hundred million units. Each unit is both individually identifiable and programmable. Users can program a unit to represent a euro cent or a share in a company. Hence bitcoin is much more than simple money and payments.
The programmable and open character of bitcoin allows us to completely rebuild and innovate our financial sector, and our administrative processes make them more efficient and transparent, and significantly decrease bureaucracy. Bitcoin and cryptocurrencies have caused a paradigm shift. It is time to explore this new technology constructively and critically, and openly discuss potential applications.
© Prabhu for Forex Videos, 2018. |
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